Using the IT Turnaround Management method case

Increased performance and cost reduction in IT are constant demands on IT management, even in non-crisis situations.

// IT Quality Improvement, IT-Strategy

The term stands for itself: IT turnaround management aims to turn around a situation, often a crisis situation, into one that is manageable and controlled. A proven toolbox helps to overcome crises. But even in times when there is no acute crisis, it is worth taking a look at this toolbox. Because where a complex application landscape meets high costs, optimisation potential is often not far away. Timely action with an analysis of IT costs and a check of the application landscape and infrastructure can not only prevent a potential IT crisis. It also creates long-term flexibility and the ability to act with regard to costs and performance. The reasons why responsible IT managers see a need for action are very diverse. Often it is the price/performance ratio of their own IT that causes discomfort in management.

The willingness to accept high fixed cost drivers in IT has passed at the latest with the Corona situation

A high share of fixed costs in the overall IT costs of a company is fundamentally unattractive, but is often accepted when "things are running smoothly". However, while most companies and industries have been able to assume a predictable future in recent years, the Corona crisis has revealed the often fatal consequences of entrenched cost structures. Many CIOs, CFOs and managing directors now have to reduce their IT costs. To do this, it is indispensable to identify the actual cost drivers and present them transparently. These can rarely be identified directly via the cost centre designation.

In countless projects, noventum consultants as IT strategy and IT sourcing experts have developed a model for the in-depth analysis of IT structures and IT costs.

Phase 1 of this generic process model (see figure below) therefore revolves much around cost analyses and the causes of high and/or fixed costs. IT know-how is indispensable for the evaluation of potentials and the qualified allocation within the cost structure. On the resulting basis, approaches for flexibilisation or, if sensible, direct reduction can then be developed, which are planned in the overall context in phase 2 and introduced in phase 3.

Goal: To reduce costs in the long term and make them more flexible with the help of optimisation of the contract structure, sourcing models or even the reorganisation of IT.

A critical look at infrastructure and application landscape reveals potential risks and possible investment backlogs

Of course, it is not only flexible and low costs that count in IT. IT must be an enabler and supporter of the daily operations as well as the strategic projects of a company. For this, security and stability of the infrastructure and application landscape are generally indispensable. However, an initial review of the IT asset list and depreciation can often already be an indicator of an investment backlog and reveal potential security gaps due to obsolete hardware. In addition to the above-mentioned cost focus, our process model is therefore also about stability and future viability as well as the question of whether shifting the issues to a service provider can be worthwhile. After all, what good is an inexpensive but inefficient and insecure IT landscape to a company?

Goal: In combination with the results of the cost analysis, make economically and technically correct decisions to ensure future viability and stability.

Topic Service providers and contracts: Dormant potentials?

Good service provider and contract management can make a huge difference in the amount and flexibility of IT costs. Not only should there be regular discussions with the individual service providers for optimisation, but an evaluation of the entire contract structure can also be useful. It may be possible to bundle services with one provider in order to realise price advantages or costs can be set depending on the use of the respective service (flexibilisation). As free as the German contract structure is, as diverse are the possibilities for optimisation in this subject area. Against the background of a cost driver analysis (see above), services can be better estimated and additional sourcing options can be developed and negotiated.

Goal: Optimisation and simplification of the contract structure lead to increased performance of the services and reduction of costs.

The noventum approach model provides various options for action and helps to make the right decisions for the future of your IT

Smart decisions are (almost) always made based on facts. Creating this factual basis and presenting it in a way that is suitable for management is not easy in IT, as purely technical knowledge is just as necessary as business knowledge.

The topics of IT cost-cutting and IT turnaround require companies and consultants to have knowledge of several large subject areas. Understanding and being able to evaluate the complex processes, infrastructure components and other assets requires business know-how as well as a wealth of experience in IT.

noventum's IT strategy & sourcing consultants provide the right mix of experts for qualified IT cost analyses and forecasts as well as for the evaluation of a company's hardware and software components.

We have incorporated our experience from many projects into a generic process model with which we support companies in the challenge of establishing or restoring an efficient IT operating model:

The required work packages are always individual and depend on the situation and future orientation of our customers' business:

An initial discussion with the client sets the focus for our analyses.

Strategically, the focus is always on increasing the transparency of IT and its costs and giving the customer the opportunity to make decisions in line with his business. To this end, we develop various action scenarios from which the client can choose before implementing changes.

Goal: After the analysis, our client has much greater transparency about the costs and performance of its IT. On this basis, wise decisions can then be made for the development of IT and the business of tomorrow.

Conclusion

The analytical methods that quickly create room for manoeuvre in a crisis context can also be used for prevention purposes or new strategic orientation.

Increasing transparency about the ACTUAL situation reveals optimisation potential and leads to better decisions, no matter what situation your company is in.



More Information

Thank you for your interest in noventum's IT & Management Consulting!

If you would like to learn even more about IT strategy or IT sourcing, you can find information and contacts here.

noventum consulting

Lukas Brinkmeyer

Senior Consultant

 

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